American Express, Yahoo, Boeing

MichaelBaron

Stocks to Watch

American Express Co.
AXP, -0.47%
said late Monday that its third-quarter earnings will be hurt by last week's terrorist attacks citing. See related story.

Electro Scientific Industries
ESIO, -0.69%
posted first-quarter losses of $2.8 million, or 10 cents a share, excluding one-time items, beating the consensus estimate by a penny. Including one-time items, the company lost $8 million, or 30 cents a share, in the latest quarter. In prior quarter, the company earned $12 million, or 43 cents a share. Sales totaled $50 million for the first quarter, down 45 percent compared with the fourth-quarter of 2001. The company noted that although its near-term outlook remains uncertain, it believes it is well positioned for future growth and profitability. Shares closed down $1.40 to $24 ahead of the announcement. In after-hours trading, shares fell another 3.5 percent to $23.15.

Exult
EXLT
said after the bell that it will receive additional revenue of $550 million over nine years from an expanded relationship with Bank of America
BAC, +0.37%
Exult will now manage administration of the bank's regional staffing function as well as management of temporary recruiting and staffing services. The original deal, announced in November 2000, was for the outsourcing of BofA's human resources process management. Shares of Exult ended down 86 cents, or 7.1 percent, at $11.19.

After the market closed, VISX
EYE, +0.40%
said that due to the severity of the continued economic downturn, licensing revenue dropped 25 to 30 percent, along with a drop in international and domestic equipment sales. As a result the laser vision correction company expects earnings to be in the range of 6 cents to 8 cents a share. Analysts polled by First Call expected a profit of 18 cents a share. Shares closed down $1.85 to $14.20.

Hewlett-Packard
HWP
said it can resume its stock buyback plan, which still has $1.8 billion available for repurchase. The plan had been temporarily suspended due to the pending merger of H-P and Compaq Computer
CPQ, -0.01%
Early Monday, Compaq also said it has resumed buying back its stock. H-P shares are down 10 percent to $16.09 just before the closing bell, while Compaq shares are down 16 percent to $8.66

Due to better-than-expected sales and continued cost control measures, Papa John's International
PZZA, +0.21%
believes its third-quarter earnings will be in the "middle to upper middle range" of its previous estimate. Previously, the company anticipated earnings falling at the low end of its 42-cent to 49-cent estimate. The company continues to believe fourth-quarter earnings will be in the range of 51 cents and 58 cents a share. Analysts polled by First Call currently expect third-quarter earnings of 42 cents a share, and fourth-quarter earnings of 51 cents a share. Shares closed down $1.19 to $23.81 ahead of the news.

Yahoo
YHOO, +0.82%
reported late Monday that it repurchased 4.96 million of its shares from Softbank America for $55 million. The private transaction had been announced previously. Softbank remains the largest shareholder of Yahoo with about a 20 percent stake. Yahoo shares closed down 86 cents, or 7.3 percent, at $10.88.

Advancers

American Water Works
AWK, -0.49%
rose $6.51, or 19.1 percent, to close at $40.63 after the company agreed to be acquired by RWE, a German-based utility company, for $4.6 billion in cash. Under the pact, RWE would pay $46 a share for American Water Works, the largest publicly traded U.S. water utility. The deal includes the assumption of $3 billion in debt.

Cylink
CYLK
soared more than 142 percent to 92 cents after Topsin Partners bought 8.6 million common shares of the Internet security firm held by Pittway, a unit of Honeywell Corp.
HON, -0.01%
(An earlier version of this item incorrectly stated that Topspin had acquired Cylink.)

Nokia
NOK, +0.66%
added $1.69, 12.3 percent, to $15.44, bucking the broad selling in the technology sector, adding $2.02, or 14.8 percent, to $15.79, as the major U.S. equity averages moderate their losses in their first day of trading since the Sept. 11 terrorist attacks. See related story.

Rambus
RMBS, +0.18%
gained 7.8 percent to $6.65 after the company said it has signed a patent cross-license agreement with Intel
INTC, +0.39%
in which Intel will be provided with complete patent coverage and Rambus will be provided with the necessary license coverage for its high-speed interface business. Rambus expects the agreement, which supersedes the prior agreement, will have a "positive material impact" on its current financial quarter. Specific terms of the pact were said to be confidential.

Visionics
VSNX
soared $3.98, or 93.2 percent, to $8.25. Buyers appear to be betting that the maker of identification technologies and systems will benefit from plans to heighten security in the wake of the Sept. 11 terrorist attacks. Before last Monday's opening bell, the company received an order from the U.S. Immigration and Naturalization Service for 10 of its 10 FingerPrinter CMS live scan fingerprint systems. Visionics' FingerPrinter products digitally capture and electronically submit fingerprint images to the Federal Bureau of Investigation.

Decliners

Activision
ATVI, -1.81%
slid 5.1 percent to $30.97 after the Santa Monica, Calif., interactive entertainment firm said it would postpone the Sept. 18th release of its SpiderMan 2 Enter Electro game for Play Station 2 due to the Sept. 11 terrorist attacks. The company said the game is based in New York City, and that its climax takes place atop a skyscraper that "loosely resembles the World Trade Center." Activision noted that the delay of the game would not have a material impact on its business and reconfirmed its earnings expectations for the second quarter and fiscal 2002. A new release date has not been set

Barnes & Noble
BKS, -0.76%
lost $2.24, or 6.1 percent, to $34.20. The New York bookseller said it has received numerous inquiries from journalists and analysts in the wake of the terrorist attacks on Sept. 11. Same-store sales figures for Sept. 11 plunged 55.1 percent from a year ago but the company noted many stores were closed following the attacks. On Sept. 12, the same-store sales were off 6.5 percent from a year ago, while Sept. 13 saw a 6.9 percent decline. Buyers came back Saturday, Sept. 15, with the company posting a 4.6 percent rise in same-store sales from last year. Sunday, Sept. 16, saw a 4.5 percent increase. The company added that none of its employees were lost in the attacks and that it would not discuss what books people were buying during this period except to note the "obvious increases in sales of books with religious or spiritual content."

Boeing
BA, +0.19%
fell $7.66, or 17.6 percent, to $35.80, making it the top decliner in the Dow Jones Industrial Average. Analyst Steve Binder of Bear Stearns said in a research note issued last week that he expects 2003 commercial aircraft production to decline 10 percent. He noted that roughly 45 percent of Boeing's production comes from U.S. airliner.

Citigroup
C, -0.37%
slid 6.7 percent to $39.60 after the company said after-tax losses in its insurance business related to last Tuesday's tragedies could negatively impact third quarter earnings by $500 million, or approximately 10 cents a share. Losses related to the closing of stock exchanges, as well as a number of branches, are anticipated to be $100 million to $200 million, or 2 to 4 cents a share. Excluding the impact of the tragedies, the financial services giant expects to report EPS of 77 cents, topping the average analyst estimate compiled by Thomson Financial/First Call of 75 cents.

Cruise line firms also tumbled in the wake of the Sept. 11 attacks. Analyst Robin Farley at UBS Warburg said in a research note Monday that, while she feels in the long term, the supply outlook for the cruise industry may improve, pressure on the industry following last week's tragedies is likely to force some smaller and weaker companies out of business. "Of course, after last week, the focus has shifted from supply issues to demand issues," Farley said in the note to clients. Among the larger cruise line companies, P&O Princess Cruises
POC, +9.38%
fell $8.30, or 38.8 percent, to $13.10; Carnival
CCL, +0.36%
dropped $9.09, or 31.9 percent, to $19.43, and Royal Caribbean Cruises
RCL, +0.07%
sank $8.55, or 40.1 percent, to $12.76.

Dow Jones & Co.
DJ
slipped 7.1 percent to $49 after the company said it remains hopeful of meeting the bottom end of its outlook for earnings of 20 to 30 cents per share in the third quarter. The New York financial news firm said that total advertising linage for its flagship product, The Wall Street Journal, fell 40.7 percent in August. The company had been projecting a decline of 25 to 30 percent. General ad lineage dropped 45.8 percent in August, and its down 38.7 percent year-to-date. Dow Jones also noted that its corporate offices have been re-located to South Brunswick, N.J., in the wake of Tuesday's terrorist attacks.

Ford Motor Co.
F, +0.61%
fell $2.85, or 14.7 percent, to $16.55 after the company said its third-quarter profit will miss its previous target of 10 cents a share because production has been interrupted by Tuesday's terrorist attack as parts are slow to arrive at plants and some shifts have been suspended. Third-quarter vehicle production will fall by 110,000-120,000 vehicles to 810,000-820,000 vehicles. Ford had been expected to earn 10 cents a share, according to a consensus of analysts as surveyed by Thomson Financial/First Call.

FuelCell Energy
FCEL, +1.22%
5.3 percent to $11.83. On Sept. 12, the day after the terrorist attacks, the company disclosed that the Connecticut Department of Public Utility Control has rejected a proposed fuel cell project that would have employed FuelCell's Direct FuelCell DFC technology. The project was a joint proposal of Enron North America and the Connecticut Resources Recovery Authority to fund 26 megawatts of fuel cell power plants.

General Electric
GE, -0.16%
lost $4.20, or 10.7 percent, to close at $35.15 after the company said it expects to incur after-tax losses of $400 million through its Employers Reinsurance Corp. unit in the third quarter due to the terrorist attacks on Tuesday. Before taxes, GE's preliminary estimate of net losses is $600 million. The company said the impact would lower its overall third-quarter results by 4 cents per share. "Before the attacks, GE was on track to meet the First Call consensus estimate for third quarter of 37 cents per share, up 16 percent from last year," the company said in a press release. "However, ERC's losses could reduce third-quarter net income by 4 cents to 33 cents per share, up 3 percent from 2000." Newly-minted CEO Jeffrey Immelt stressed the company's fundamental financial strengths remain unchanged and that GE is working to help people "get through this terrible tragedy."

General Motors
GM, +1.66%
said it's still on track to earn 83 cents a share in the third quarter, in line with its earlier profit projection. The world's biggest automaker noted that Tuesday's attacks would curb quarterly production by 10,000 units amid parts shortages and production halts at its plants. Shares lost $6.98, or 13.5 percent, to $44.60.

Instituform Technologies
INSUA
plummeted $10.01, or 38.5 percent, to $16 after the Chesterfield, Mo., piping systems firm warned that it expects third-quarter earnings before items of 15 cents per share. Analysts polled by Thomson Financial/First Call were looking for a profit of 48 cents a share in the September quarter. Specifically, the company said it expects revenue from its North American rehab operations to come in roughly $12 million short of previous expectations due to lower than expected backlog. In addition, the company cautioned that if work stoppages spread beyond the New York area, its results could be adversely impacted. Instituform also said it would refrain from offering an outlook for the fourth quarter at this time and that its board has authorized the buyback of up to 1 million additional shares, bringing its total current authorization to 2.5 million shares.

Matrix Pharmaceutical
MATX, +0.58%
plunged 83.8 percent to $1.10. On Sept. 11, the day of the terrorist attacks, the Fremont, Calif., firm disclosed that the Oncologic Drugs Advisory Committee of the Food and Drug Administration has found that Matrix "had not demonstrated substantial evidence that its IntraDose injectable gel is safe and effective in the treatment of symptomatic recurrent head and neck cancer." Specifically, the company said the committee questioned whether or not tumor response rates in two clinical trials were "reasonably likely to predict clinical benefit." Matrix plans to continue to explore the next steps for IntraDose.

Microchip Technology
MCHP, -0.87%
lost 9.5 percent to close at $30.41 after the company said sales in its current quarter is tracking in line with previously-given expectations of $136 million to $141 million, based on data seen during July and August. Earnings for the period expected to be 15 to 17 cents a share, surrounding the average analyst EPS estimate compiled by Thomson Financial/First Call of 16 cents.

Morgan Stanley
MWD, +0.00%
dipped $6.40, or 13.1 percent, to close at $42.50. Before the opening bell, the company said it expects to utilize some or all of the roughly $1 billion in remaining authorization under its capital managment and equity anti-dilution repurchase programs. The New York financial services firm said the timing of the buys would be determined by market conditions. Morgan Stanley, formerly the biggest tenant in the World Trade Center, lost a number of employees in the terrorist attack.

Park Place Entertainment
PPE, -40.00%
sank 19.4 percent to $8 after the company decided to postpone the construction of a new 29-story, $475 million hotel tower at Caesars Palace in Las Vegas due to the slowing economy and the travel industry disruption resulting from Tuesday's terrorist attacks. Other gaming stocks also sold off including Harrah's Entertainment
HET
and MGM
MGG, +0.00%
Lodging stocks such as Hilton Hotels
HLT, +0.65%
Starwood
HOT, -0.34%
Host Marriot
HMT, +7.14%
and Four Seasons
FS
also fell.

Rowan
RDC, +2.55%
fell $1.12, or 7 percent, or $14.80 after the company warned that it expects earnings of 20 to 25 cents a share in the third quarter, below the average estimate of analysts polled by Thomson Financial/First Call for a profit of 29 cents a share. The company noted that its offshore rig utilization for the quarter is estimated at 70 percent, down from 90 percent in the second quarter. Rowan's average offshore day rate for the period is expected to be around $57,000, down from $61,000 in the second quarter.

Solectron
SLR, +3.26%
gave $1.19,or 9.9 percent to $10.82 after the company reported a fourth-quarter loss of $250.3 million, or 38 cents per share, down from earnings of $171 million, or 27 cents a share, in the year-earlier period. Excluding items, the electronic contract manufacturer lost 10 cents a share. Cash earnings, which exclude the impact of certain non-cash items and restructuring and impairment costs, were 6 cents a share, in line with previously disclosed expectations. Sales for the period were $3.6 billion, down from last year's $4.7 billion, and above the average analyst estimate compiled by Thomson Financial/First Call of $3.2 billion. The company added that gross margins declined, as an increase of PC sector sales were offset by a decline in higher-margin sectors such as telecommunications. Separately, the company said it had authorized a stock repurchase program valued at up to $200 million.

Toll Brothers
TOL, -1.52%
said deposits and traffic for the past week were off about 35 percent from the comparable period a year earlier. Meanwhile, the luxury homebuilder said the number of deposits it took in was comparable with the average of the past five weeks. The shares, however, slid $3.11, or 9.4 percent, to $30.10. The company added that the Federal Reserve's rate cut earlier in the day should have a "positive" impact on the economy and on the housing industry.

United Technologies
UTX, +0.11%
dropped $18.70, or 28.2 percent, to $47.50 after the company said it remained "on track" to meet current consensus analyst expectations for third quarter earnings, but said its fourth quarter results "will be under pressure" due to disruptions in the commercial airline industry. Analyst surveyed by Thomson Financial/First Call are currently expecting EPS of $1.11 and 97 cents, respectively, on average. The company said fourth-quarter EPS could be as much as 30 cents lower than expectations.

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